A week after NAB launched their ‘break up with your bank’ campaign, other major banks have begun their own marketing onslaught, this time seeking to snatch business customers back from NAB.
Both the Commonwealth Bank and Westpac have taken out full page ads in major newspapers, urging businesses to switch their accounts and business loans over to them.
And CBA hasn’t been coy about specifically targeting NAB’s business customers, with the headline reading, ‘Don’t get nabbed by a liquidity margin’.
CBA highlighted that opposition banks charge excessive fees on business loans, directing potential customers to the conveniently named webpage called commbank.com.au/nabbed.
Westpac have gone a step further, promising to cover up to $20,000 of switching costs for business borrowers, while waiving both establishment and account keeping fees.
Last week NAB asked mortgage holders to switch to them, claiming they would offer consumers a better deal.
But NAB appears to be struggling to satisfy business customers. According to a recent survey by DBM Consultants, NAB are ranked fourth of the big four in the business market and are expected to lag further after a series of transaction processing problems late last year.
Ingrid Just from consumer advocate group CHOICE, says the new competition is being fuelled by the continued disappointment many customers feel with the big banks.
“There have obviously been some heavy marketing campaigns tapping into the high level of dissatisfaction.”
But despite the large promotions, there is still no indication of whether the marketing is actually making customers change banks.
Just says that switching banks is still considered to be too annoying for customers.
“It’s tough and time consuming for an individual to switch banks, for businesses, it’s a minefield of hassles and headaches. There are so many suppliers, customers and payroll functions linked in to business banking accounts, it’s very difficult to switch.”
She also suggests banking customers look carefully at the deals on offer before making the switch.
“Despite these short-term sweeteners, it’s more important for businesses, and individuals, to take a long-term view, making sure the bank they choose will suit their long-term banking needs.”
Council of Small Business of Australia executive director Peter Strong is sceptical of the recent promotions, saying it’s like an ‘orchestrated soap opera’.
“They are spending money on these marketing campaigns, but they don’t make lending any easier or cheaper for small business. I still hear so many stories about small businesses that continually get denied access to funding,” he says.
“I’ll start paying more attention when small business lending conditions improve. These advertising campaigns are a mere distraction.”
With NAB, CBA and Westpac making significant noise in the market place, only ANZ is yet to be drawn into the price war.
But a move is unlikely, ANZ CEO Mike Smith saying he’s not interested in the current price war. ”I’m not really interested in a short-term tactic” he told The Age.
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